May 1, 2013
By Taimur AhmadSeven years ago, former US Treasury Secretary Lawrence Summers proposed what, at the time, seemed to many people a radical idea.
Summers, then president of Harvard University, suggested in a lecture that a portion of the wealth being rapidly accumulated worldwide by central banks – chiefly in the emerging markets through their foreign exchange holdings – should be invested in more productive and higher-yielding assets, rather than ploughed into low-yielding US Treasury bills.
“6% would not be an ambitious estimate of what could be earned” by investing reserves domestically in infrastructure or in a “fully diversified way” in global capital markets, he told an audience at t
An unprecedented surge in reserves has left central bankers struggling to find yield – and still play it safe